Great Plains Energy, Inc. (ticker: GXP, exchange: New York Stock Exchange (.N))
News Release -
Aquila Energy Acquisition of USGT Expands Natural Gas Marketing Activities
KANSAS CITY, Mo.--(BUSINESS WIRE)--March 14, 2000--Aquila Energy Corporation, a wholly owned subsidiary of UtiliCorp United (NYSE:UCU), has agreed to acquire the marketing assets of Dallas-based U.S. Gas Transportation, Inc. (USGT), an independent marketer of natural gas, asset management and commodity services serving the mid-western and western United States and Canada.
The closing of the acquisition is contingent upon the fulfillment of certain conditions. Aquila and USGT anticipate that the conditions will be fulfilled and the transaction completed before March 31, 2000. USGT will operate under the name USGT/Aquila, L.P.
USGT specializes in identifying and capitalizing on developing markets. It concentrates on developing relationships with natural gas producers, utilities and independent power plant builders and operators. The company, with 20 employees, will remain in Dallas and will play a key role in Aquila's expanding marketing activities. One of the hallmarks of USGT is its dedication to providing customers with 24-hours-a-day, seven-days-a-week service. This includes having an energy expert available to answer emergency telephone calls around the clock.
"USGT provides us a good strategic advantage in a marketplace that is becoming more competitive," said Ed Mills, president and chief operating officer of Aquila. "USGT also brings to us excellent relationships in a growing market segment."
"The purchase by Aquila will allow USGT to expand its natural gas management and marketing operations in the western states," said Nanci Mackenzie, who founded the company in 1987.
Following the acquisition, Nanci Mackenzie will become president of USGT/Aquila and will oversee the company's daily operations. Her husband and business partner, Len Mackenzie, will remain a USGT/Aquila executive vice president and provide marketing support to Aquila's President, Ed Mills.
In another transaction completed in February, a separate subsidiary of Aquila acquired real estate from USGT and additionally obtained the right to proceed with the construction of a salt cavern natural gas storage facility in the West Texas Permian Basin. The facility, known as the Chaparral Project, will be near the Waha trading hub and pipeline interconnections. It also will have the ability to inject or withdraw large quantities of natural gas on a short-notice basis.
It is estimated that when the storage facility is completed it will hold up to 6 billion cubic feet of natural gas. Interest in storage capacity in Texas has increased in the past year since state lawmakers passed energy deregulation legislation that requires power plants to be fueled 50 percent by natural gas.
At the end of 1999, Aquila was ranked as the third-largest wholesale marketer of natural gas and second-largest wholesale marketer of power in the United States. Aquila also provides wholesale energy services in Canada and the United Kingdom. In 1999 the company established a presence in Scandinavia, Germany and Spain.
Aquila's parent, UtiliCorp United, is based in Kansas City and is a multinational energy company with approximately 4 million customers. It operates in the United States, Canada, the United Kingdom, western Europe, New Zealand and Australia. At December 31, 1999, UtiliCorp had $7.5 billion in assets and 12-month sales of $18.6 billion.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the business of UtiliCorp United Inc. and Aquila which are not historical facts are "forward-looking statements" that involve risks and uncertainties and could cause actual results to differ from those contained in the forward-looking statements. These risks and uncertainties include the risk that certain contingencies will not be fulfilled and the acquisition of assets of USGT will not be consummated as well as the risks and uncertainties inherent in the development and construction of natural gas storage facilities in general.
CONTACT: UtiliCorp United, Kansas City, Mo.
Al Butkus, 816/467-3616
Media Relations, 816/467-3000
Dale Wolf, 816/467-3536
Ellen Fairchild, 816/467-3506